American Express Co: Greater Disclosure of Material Corporate Diversity, Equity and Inclusion Data
BE IT RESOLVED: Shareholders request that American Express Company (American Express) report to shareholders on the effectiveness of the Company's diversity, equity, and inclusion efforts. The reporting should be done at reasonable expense, exclude proprietary information, and address outcomes, using quantitative metrics for recruitment, retention, and promotion of employees, including data by gender, race, and ethnicity.
SUPPORTING STATEMENT: Quantitative data is sought so that investors can assess, understand, and compare the effectiveness of companies’ diversity, equity, and inclusion programs and apply this analysis to investors’ portfolio management and securities’ selection process.
WHEREAS: Numerous studies by respected organizations such as The Wall Street Journal, Credit Suisse, Morgan Stanley, and McKinsey have pointed to the material benefits of a diverse workforce.
Companies should look to hire the best talent. However, Black and Latino applicants face recruitment challenges. Results of a meta-analysis study of 24 field experiments, dating back to 1990, found that, with identical resumes, White applicants receive an average of 36 percent more callbacks than Black applicants and 24 percent more callbacks than Latino applicants.”
Promotion rates show how well diverse talent is nurtured at a company. Unfortunately, women and non-White employees experience “a broken rung” in their careers. For every 100 men who are promoted, only 86 women are promoted. Non-White women are particularly impacted, comprising 17 percent of the entry-level workforce and only 4 percent of executives. Employees with the potential for advancement have a higher retention rate.
Morgan Stanley found that “[e]mployee retention that is above industry peer averages can indicate the presence of competitive advantage. This advantage may lead to higher levels of future profitability than past financial performance would indicate.” Companies with high employee satisfaction have been linked to annualized outperformance of over two percent.
American Express has stated: “To ensure more balanced representation at all levels of the company, American Express has a comprehensive strategy that encompasses recruitment, hiring and promotion practices to attract, develop and retain underrepresented colleagues.” However, American Express has been unwilling to share sufficient recruitment, retention, and promotion data to allow investors to determine the effectiveness of its human capital management programs. Between September 2020 and September 2021, the number of S&P 100 companies releasing recruitment rate data by gender, race and ethnicity increased by 234 percent, companies releasing retention rate data increased by 79 percent, and companies releasing promotion rate data increased by 379 percent.
Allstate, BlackRock, Citigroup, Goldman Sachs, JPMorgan Chase, MetLife, Progressive, and State Street, among others, all release more data on the effectiveness of their human capital management programs than American Express does. Visa has committed to release the entirety of the requested data set.
A shareholder resolution with a similar request was voted on by American Express shareholders on May 4, 2021. It received support from 60 percent of investors. As of October, 2021, American Express has not yet increased its reporting of workforce inclusion data.
Resolution Details
Company:
American Express Co
Lead Filer:
As You Sow
Year: 2022
Filing Date:
November 2021
Initiative(s): Diversity Data Disclosure
Status: Resolution Withdrawn, Agreement Reached